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BUSINESS
IN BRIEF 11/5
Ministry
rejects fuel price hike proposal
The Ministry of
Finance has turned down a fuel retail price hike proposal by fuel
wholesalers, saying they should keep the current prices unchanged despite
input costs higher than selling prices.
The Price
Management Department under the ministry sent the request to the Vietnam
National Petroleum Group (Petrolimex) and Dong Thap Petroleum Trading Import
Export Company (Petimex).
The department said
the 30-day average price of most fuel products had inched up compared to the
30-day average taken into account for gasoline, diesel oil and kerosene price
increases on April 22. However, as global prices dropped last week,
wholesalers should refrain from proceeding with any price spikes.
In the coming time,
the department will coordinate with the Ministry of Industry and Trade to
follow new developments on the market for timely intervention.
Petrolimex and
Petimex on Monday sent business reports to the ministry, pointing out the
differences between retail and base prices. However, the ministry rejected
their price hike proposal.
On April 22, local
fuel trading enterprises adjusted up the price of A92 gasoline to a record
high of VND24,900 a liter while prices of diesel oil and kerosene also moved
up.
Meanwhile, as per
the base price calculation published on the website of the Vietnam Petroleum
Association (Vinpa) on Monday, the 30-day average price (from April 5 to May
5) increased, so the base prices of gasoline, diesel oil and kerosene are now
higher than retail prices.
Traders claimed
they are losing VND306 for every liter of gasoline sold, followed by diesel
oil with VND184 a liter and kerosene with VND144 a liter. However, heavy fuel
oil earns them VND30 for every kilo sold.
Meanwhile, enterprises
who act as general gasoline agents flourished in the first three months of
this year.
Saigon Fuel Joint
Stock Company posted a net profit of nearly VND8.2 billion in its first
quarter, rocketing nearly 500% against the same period of 2013. The rise of
remuneration offered by wholesalers was attributed to the firm’s hefty profit
rise.
Materials Petroleum
Joint Stock Company also reported an after-tax profit of over VND7.4 billion,
a 31.5% year-on-year increase.
Petrolimex has yet
to announce the first quarter financial report. However, Tran Ngoc
Petrolimex as a
public company is expected to announce the report in the middle of this month
as regulated.
Petrolimex’s
announced losses turn out to be profits
Petrolimex saw
profits of $40.4 million from its petroleum business in 2013, despite
consecutively reporting losses in the sector.
According to the
updated 2013 business result sent to shareholders, Vietnam National Petroleum
Corporation (Petrolimex) saw a pre-tax profit of VND2.021 trillion ($96.2
million) and after-tax profit of VND1.578 trillion ($75.14 million).
For its domestic
petroleum business, the corporation achieved pre-tax profits of nearly VND850
billion ($40.4 million).
Previously,
Petrolimex announced it had reached consolidated pre-tax profits of VND2
trillion ($95.2 million) for 2013, of which profits from petroleum amounted
to VND768 billion ($36.5 million). Given the most updated report, profits
from this sector rose VND80 billion ($3.8 million) against the previous
report.
Petrolimex deputy
general director Tran Ngoc
“This first number
was quoted from January 12, and therefore we had not yet had enough time to
do our final accounting,” he told VNExpress.net.
This high level of
profit seen from Petrolimex raises many questions, when looking back to 2013,
it consistently lobbied to increase its petroleum price due to losses.
Specifically, it
raised the petroleum price four times last year, to an end of year price of
VND2.640 per liter.
In 2014, Petrolimex
anticipates consolidated revenue of VND200 trillion, of which pre-tax profits
are expected to reach VND2 trillion ($95.2 million), down very slightly
against last year.
As of December 31,
2013, the total consolidated assets of corporation stayed at VND57.454
trillion ($2.735 billion), up by 4 per cent against 2012.
As of December 31,
2013, the total consolidated assets of the corporation were valued at
VND57.454 trillion ($2.74 billion), up 4 per cent against 2012.
Vinafood
2’s loose management at fault for massive losses
As
Vinafood 2 consists
of 44 member companies, of which 14 are under its direct management.
By the end of 2013,
half of these 14 businesses posted nearly VND1 trillion ($47.6 million) in
cumulative losses and irrevocable debts, according to Vinafood 2 reports.
Specifically, Tra
Vinh Food Company reported losses of VND134 billion ($6.4 million), An Giang
Food and Foodstuff Company VND83 billion ($3.9 million), Bac Lieu Food
Company VND42 billion ($2 million), and Tien Giang Food and Agricultural
Products Company VND25 billion ($1.2 million).
Poor management is
believed to be a major reason behind Vinafood 2 member’s huge outstanding
debt in the amount of VND420 billion ($20 million)
Specifically, in
late 2012, member Vinh Long Food signed contracts to export 94,000 tonnes of
sliced cassava for two other businesses with delivery slated for June 2013.
The Thinh Phat Kon Tum Company was responsible for supplying the products.
This deal was
questionable, as Vinh Long Food advanced money before receiving the products,
got staff members to forge invoices showing receipt of the goods and allowed
Thinh Phat Kon Tum staff to sell off products resulting in losses of VND130
billion ($6.2 million).
Other member
companies under Vinafood 2 signed contracts to sell rice to Ho Chi Minh
City-based Vo Thi Thu Ha Trade – Import Export Company Limited and its two
subsidiaries, Tan Hoa Loc and Binh Loi Limited, that are still unpaid for.
As of this time, Vo
Thi Thu Ha Limited also owes VND174 billion ($8.3 million) to Vinh Long Food,
VND160 billion ($7.6 million) to Hau Giang Food, VND47 billion ($2.2 million)
to Dong Thap Food, and VND26 billion ($1.2 million) to Soc Trang Food.
In late April 2014,
Vinafood 2 filed a lawsuit against Vo Thi Thu Ha Limited in the People’s
Court of Ho Chi Minh City’s Phu Nhuan District, looking to recoup these owed
amounts.
Three out of seven
of Vinafood 2’s loss-making member firms were put under financial supervision
because of these losses.
These firms used
short-term bank loans for long-term investments which they are reportedly
having trouble paying back.
For instance, Tra
Vinh Company, with cumulative losses of VND134 billion ($6.3 million), took
out VND82 billion ($3.9 million) in short-term loans for long-term
investments.
“This has brought
the company’s total debt/equity ratio to VND629 billion ($30 million)/minus
VND18.5 billion ($880,000), clearly showing the inability to pay back its
debts as well as a fundamental disregard for effective finance amid a
difficult time in the market,” said a Vinafood 2 report.
An Giang Food and
Foodstuff and Bac Lieu Food face the same issues and Tien Giang and Tra Vinh
Foodstuff and Agricultural Products reportedly have plans to suspend their
operations.
Despite finding
numerous cases of wrongdoing by its subsidiaries, Vinafood 2’s penalties have
not been harsh enough. They have been limited to internal chiding, which has
allowed the situation to persist.
According to
Vinafood 2 former general director Truong Thanh Phong, a combination of
factors are behind its subsidiaries repeated losses, most notably a lack of
responsibility from their management.
On the Vinafood 2
case, head of the Enterprise Management Department at the Ministry of
Agriculture and Rural Development (MARD) Do Van Nam said recently, “The
ministry is investigating these consistent losses and we will release an
official statement on the case early next week.”
“After making clear
Vinafood 2’s receivables, MARD will urge its management to work on plans to
speed up its recouping of debts as the company is a state corporation with
MARD as the state’s capital representative,”
KPMG
appointed to advise Orient Commercial Bank on risk transformation
Ho Chi Minh
City-based Orient Commercial Joint Stock Bank has recently appointed KPMG
Limited, a leading professional audit, tax, advisory services firm, to advise
it on a risk transformation project. This appointment comes as part of Orient
Bank’s ongoing efforts to enhance governance and risk management policies and
processes.
The project will
enable the bank to move towards international best practice and standards of
risk management and will also assist the bank in ensuring that it complies
with risk management regulations handed down from the State Bank of
The bank (OCB),
with support and guidance from its strategic partner BNP Paribas, has already
established various risk management policies, processes and procedures.
The bank’s
management, however, recognises the need for constant improvement to stay
competitive in a market which is becoming increasingly complex and in an
economy and regulatory environment which are constantly developing and
changing.
After an extensive
assessment process, the management of the bank came to the decision that KPMG
was the right firm for them to work with on this important project.
Using a team of
local and regional resources, KPMG will work with the bank to make
enhancements in relation to credit, market and operational risk management as
well as to the overall risk management structures and processes in place at
the bank.
“The appointment of
KPMG shows the pro-activeness and foresight of OCB’s senior management to
comply not just with local requirements, but to work towards the best
practice risk management standards employed by banks in more developed and
complex markets. Through enhancing risk management the bank will improve
stakeholder value and, in a more general sense, contribute to the ongoing
strengthening of the banking sector in
Chairman and CEO of
KPMG Limited Warrick Cleine, who attended the signing ceremony last week
added that KPMG’s depth and breadth of experience in the Vietnamese banking
sector was a key reason why KPMG was appointed.
It is expected that
the initial engagement will last for a period of between 9 – 12 months.
Developers
of workers’ accommodation to get incentives
A proposed new
decree will offer incentives to people building housing for workers, Minister
of Construction Trinh Dinh Dung has said.
He made the
statement while taking a delegation of officials to workers’ dormitories in
The group visited a
workers’ dormitory at the Tan Thuan Processing Zone in District 7 built by
the South Saigon Development Corporation (Sadeco). Its 520 rooms accommodate
around 1,700 workers, and the complex has lots of facilities.
Each worker pays
VND300,000 (US$15) per month including electricity and water charges.
Sadeco executives
sought more tax breaks.
Dung told them that
Decree 188 on development of social housing would offer loans at 5 percent
interest, personal income tax exemption, and assistance with design and
planning to encourage people to build housing for workers.
But to get these
benefits, investors have to build standard accommodation as regulated, he
said.
The team also
visited two housing blocks in Linh Trung Ward, Thu Duc District, with 27 and
24 rooms rented out to workers.
The minister
appreciated the two landlords for providing decent accommodation for a worker
at a reasonable VND500,000 rent per month.
He admitted that
many workers in industrial parks and export processing zones have to make do
with substandard accommodation and lack of facilities.
The landlords told
him that if they can get low-interest loans and support from the government,
they would enlarge their buildings to provide more rooms to workers.
Nguyen Tuyet Anh,
one of them, said local authorities should temporarily register workers’
children so that they can go to school.
Dung said closer
coordination is needed between the government and investors to build more
housing for workers.
Central
bank, district leaders arrange bank credit for businesses
Eight commercial
banks signed a contract May 8 with 45 businesses in Binh Thanh District, Ho
Chi Minh City, to lend VND1.1 trillion (US$52.2 million) at 6-8 percent.
The deals were
struck at a meeting arranged by the State Bank of
The eight banks are
Sacombank, Vietcombank, ABBank, BIDV, Agribank, Eximbank, DongA Bank and ACB.
The central bank
has organized nine such meetings this year, according to Nguyen Hoang Minh,
deputy director of the branch.
These programs have
yielded VND6.5 trillion in preferential loans to 270 enterprises, 21
home-based production units, and four cooperatives in nine districts.
Bank lending in the
city grew by 1.47 percent in the first four months compared to 0.62 percent
for the country as a whole, he added.
Aman Group
announces leadership changes
Aman Group, the
holding company of the international luxury resort collection Amanresorts,
last week announced its visionary founder, Adrian Zecha, had decided to step
down from his position as chairman and CEO.
Johan Eliasch, a
global business leader with extensive brand-building expertise, has been
appointed chairman of the Aman Group and Vladislav Doronin, a world-class
developer of high- end residential and commercial properties and a leading
investor, has been appointed CEO.
“We are grateful
for Adrian Zecha’s outstanding achievements and we are committed to extending
his legacy to build on Amanresorts’ foundation as a luxury global resort
brand,” said Johan Eliasch. “As someone who is very familiar with the
distinctive Aman experience, I am excited to take on this role as chairman.”
The group’s new
CEO, Vladislav Doronin said, “The Aman Group’s philosophy is to immerse
guests in a unique and personal experience. As lead investor and CEO, I am
dedicated to ensuring that the organization has the necessary resources to
sustain and enhance its position as an industry pioneer. The future holds
great promise for this iconic brand.”
Founded in 1988,
Aman Group operates 26 luxury resort properties under the Aman brand in 18
countries. Each of its one-of-a-kind properties features locally-sourced
materials, reflecting the resort’s natural surroundings and the traditions of
local cultures in Thailand, Bhutan, Cambodia, China, France, Greece, India,
Indonesia, Italy, Laos, Montenegro, Morocco, Philippines, Sri Lanka, Turkey,
Turks & Caicos Islands, the US and Vietnam.
In Vietnam, Aman
Group launched a top-grade Amanoi resort in Ninh Hai district in the
south-central
Launching
of phase I world-class workshop system and logistic centre in Haiphong
Third-party
logistics provider Damco and Vietnamese warehouse owner Construction and
Mechanic JSC (HTM) have opened a new warehouse in northern
The long-term HTM -
Damco partnership will lead to the development of Hai Thanh workshop area
with more than 20,000 square metres over the next three years.
Hai Thanh workshop
area phase I and Damco logistics centre in Duong Kinh district in the
northern port city of
The project targets
foreign investors operating in ancillary industries, and industries that have
little effect to environment. Under the plan, in 2015 the Hai Thanh warehouse
project will complete its entire infrastructure and it is expected to come on
stream from 2016.
The new warehouse
will enable Damco to play a dual role as a warehousing and distribution hub
as well as a gateway to attract customers who are actively trading to and
from South China via this corridor – a key focus for Damco’s future
development in northern
Located in
It reaches high
international standards and is well positioned to support increased volumes
and offer modern safety, security and fire-fighting systems.
A key focus during
construction and operation is the reduction of carbon emissions in accordance
with Damco’s environmental policy.
The
Damco established a
branch office in
Marco Civardi, Area
managing director of Damco Vietnam/Cambodia said, “The inauguration of the
Damco Haiphong’s warehouse is an important landmark in Damco’s long history
in
The aim of Damco is
to continue providing supply chain management solutions that match its
customers’ increasing volumes, while aiming to outperform market growth in
ocean and air products on defined trade-lanes and industry verticals.
“Key for us also
will be the growth of our domestic business such as customs clearance and
trucking services, together with our planned warehousing footprint expansion.
The latter is based on new business opportunities related to our business and
contract logistics customers,” Civardi added.
HTM’s president Dao
Manh Sen shared “As a port and industrial city with rosy potential for
development of port logistics services,
Damco has invested
significantly in state-of-the-art warehouse management systems and processes
to raise productivity and increase efficiency, directly benefitting
customers’ supply chains.
Customers now get
visibility on the status of their products as they pass through the
consolidation process in the warehouse, as well as when they are packed into
the container and shipped to the port.
Damco is a pioneer
in the logistics sector in
HTM was established
in 2002 with main fields of investment in industrial zones and urban zones
infrastructure, seaport logistics and construction. HTM aims to create
favourable conditions for local and foreign investors to develop business
through providing modern, synchronised and infrastructure and professional
customer services.
Quang Ngai
revokes IP license
Quang Ngai People’s
Committee just decided to return nearly VND1 billion ($47,600) to Tan Tao
Group after its license for building the
Tan Tao Group
received the investment certificate to develop the park in Duc Pho district,
Quang Ngai province, in 2009.
However, the group
was not able to start construction until 2012 and even had its investment
certificate withdrawn for the delay.
The aforementioned
sum to be returned to Tan Tao is for geological research, planning and an
environmental appraisal report conducted by the company.
Once the money is
returned, Tan Tao will have to return all the original legal documents for
the above items and documentation to confirm they accepted the transfer of
those items to the Quang Ngai Industrial Park Management Board.
Together with the
decision to return VND1 billion to Tan Tao, the Quang Ngai People’s Committee
also requested the local Industrial Park Management Board to be in charge of
efficiently using the items Tan Tao transfers over.
All these items
will be provided to the project’s investor, once a new one is found.
In June 2010, local
authorities decided to revoke the license of the film studio project, which
was originally registered as a $50 million investment. The $57 million
complex started work in 2008 but has seen very slow progress.
The complex will
include areas for trade, services, luxury villas and a sports complex.
Tan Tao is among
the largest private groups in
The developer has
eight other industrial parks in the works including Tan Duc, Tan Tao, Kien
Luong, and Ha
Jasmine
rice price surges on high demand
Domestic prices of
jasmine rice and paddy have increased strongly owing to higher demand and
lower supply, local rice traders said.
Ngo Ngoc Yen,
director of HCMC-based Yen Ngoc Company, said that prices of jasmine paddy in
the Mekong Delta had been up by VND300-500 per kilogram in the past week.
Nguyen Thanh Tho, a
rice trader at Ba Dac Market in
Pham Thai Binh,
director of Trung An Co. Ltd in the Mekong Delta City of Can Tho, ascribed
the price rises to the limited supply of jasmine rice while demand for this
product, particularly of foreign markets in Southeast Asia and Africa, had
jumped recently.
Binh predicted
prices of jasmine rice and paddy to continue increasing, partly because the
coming summer-autumn crop will not produce large output.
The export price of
jasmine rice has grown by US$20-30 per ton to US$520-530.
The Vietnam Food
Association (VFA) said its member companies had exported some US$689 million
worth of around 1.7 million tons of rice at FOB prices as of the end of last
month. Last month alone, they shipped around 351,000 tons of rice with 30% of
it jasmine rice.
Hydrofoil
operators want clear roadmap for service resumption
The hydrofoil
operators on the HCMC-Vung Tau route have proposed the Government and the
Ministry of Transport set out a clear roadmap and conditions for them to
resume operations.
The proposal came
more than three months after all hydrofoil services between the two cities
were suspended for safety checks following a fire on a Vina Express boat en
route from HCMC to Vung Tau.
Bui Cong Trung,
chairman of Vina Express, told the Daily that replacing old hydrofoils with
new ones would require much time to find appropriate hydrofoils for the
waterways of HCMC and Vung Tau cities.
“It takes at least
nine months to one year to look for suitable hydrofoil designs, excluding the
time for boat building and delivery. Therefore, the company needs two to
three years to develop a new hydrofoil fleet,” Trung said.
However, Trung said
as Vina Express had spent big repairing and replacing engines of its current
hydrofoils, the company did not have much money left to invest in a new
fleet.
Trung was concerned
that it took the company at least 10 years to recover the investment in
buying new hydrofoils as more people would choose to travel between HCMC and
Tran Quoc Hieu,
deputy director of Petro Express, also voiced concerns over new investments
in new hydrofoils as a hydrofoil cost tens of billions of dong. But any fare
hikes would force passengers to walk away.
“The travel time
between HCMC and Vung Tau by expressway and hydrofoil are almost the same but
the bus fare is lower, so new investments in hydrofoils could not easily
guarantee profits as before,” Hieu said.
Commenting on the
Ministry of Transport’s argument that fixing technical problems of old
hydrofoils were just temporary and situational, Trung of Vina Express said
that the faults detected on the current hydrofoils were minor and could be
fixed easily.
Therefore, the
operators want to use their existing hydrofoils for five more years so that
they will be able to recover repair costs and have enough time to invest in
new boats.
However, inspectors
of the ministry said allowing the current hydrofoils to continue operating
for some more years should be decided based on regulations on the time limit
for hydrofoils which the Government will issue, probably later this year.
The inspectors have
suggested that the current hydrofoils should be allowed for operation for
only two more years and that the operators should seek ways to invest in new
hydrofoils as soon as possible.
The ministry has
reported to the Government about the matter.
Fertilizer
imports fall sharply
Fertilizer imports
plunged in value in the first four months of this year and enterprises
attributed this sharp decline to falling prices on global markets.
Figures of the
Ministry of Agriculture and Rural Development indicated that
The ministry said
around 22,000 tons of the total volume was urea fertilizer worth US$7.4
million, down 64% in volume and 69% in value while SA fertilizer made up
300,000 tons worth US$42 million, declining 1.8% in volume and 33% in value.
Reality showed
import prices of fertilizer products tumbled in the January-April period but
retail prices on the domestic did not move in the same direction.
Nguyen Minh Dang,
director of Minh Dang Agricultural Materials Trading Company based in Can
Tho, said that his company sold a 50-kilo bag at VND380,000-390,000
(US$18-18.5), VND10,000 higher than in the autumn-winter crop late last year.
Nguyen Thi Chien,
director of Hai Chien Company in
However, fertilizer
products were sold at VND10,000-20,000 per bag higher during the peak periods
of sowing for this year’s winter-spring and summer-autumn crops compared to
the average prices that traders have applied since early this year.
Apparel
exporters face strict environmental criteria
A small number of
local exporters can meet the stringent requirements for environmental sustainability
that
Deputy general
director Dang Vu Hung of Vinatex told a conference on environmental criteria
for garments and textiles in HCMC on Monday that only 5-10% of the 200
affiliates of the group could meet those criteria that more foreign importers
were placing an emphasis on.
“Meeting the
criteria for environmental sustainability is considered as a passport for
Vietnamese enterprises to send their goods to foreign markets. However, just
a few local companies can do this,” Hung said.
Hung recalled the
‘laissez-passer’ for Vietnamese apparel enterprises in previous years was
social corporate responsibility but importers were urging exporters to follow
environmental requirements.
The criteria for
environmental sustainability covered green production and wastewater
treatment for finished products as well as dust and byproduct treatment for
materials. “If local exporters did not meet these requirements, they would be
kicked out of foreign markets,” Hung said.
Hung said Vinatex
had targeted to have 30-40% of its member companies able to meet the
environmental criteria by 2020. To realize this goal, the group will earmark
15% of its annual investment funding of VND8-10 trillion (US$380-475 million)
for improving the wastewater treatment systems and working environment at the
companies.
Le Quoc An, former
chairman of the Vietnam Textile and Garment Association, projected two
development scenarios of completing a chain for materials and finished
products and adding value to the sector by brand building, design enhancement
and distribution expansion.
Tra fish
exporters to rely on VN Pangasius
Seafood enterprises
will have to obtain a confirmation of signed contracts from the Vietnam
Pangasius Association (VN Pangasius) for their tra fish exports from June 30
this year as regulated in a new decree of the Government.
Decree
36/2014/ND-CP says tra fish exporters will have to seek approval of VN
Pangasius for the deals they have signed with their customers before they are
allowed to deliver the fish.
The association
will check to see if enterprises have met all the requirements provided in
the decree or not and customs officers will depend on the confirmation by VN
Pangasius to complete clearance procedures for the exporters.
The decree
clarifies exporters must have fish farms located in the already-zoned areas
approved by the Ministry of Agriculture and Rural Development and meet the
criteria for fish processing and exporting. It also requires trade agreements
between processing enterprises and the households and cooperatives that
supply the fish.
If the processors
and fish farmers do not have any trade agreement, VN Pangasius will decide
the export price of fish and arrange agreements for the two sides to avoid a
situation in which exporters sell tra fillets at much higher prices than they
offer to farmers.
From December 31,
2015, owners of tra fish farms will have to meet Vietnamese Good Agriculture
Practices (VietGAP) or related global standards such as GlobalGAP and ASC as
stated by the decree.
As usual,
The new decree also
regulates an ice topping rate of lower than 10% for every one kilogram of tra
fish fillets or that local exporters should meet the relevant standards of
importing countries.
In the past,
Bentley
unveils official dealership in Vietnam
Bentley Motors has
announced its first dealership in
According to
distributors of imported automobiles in
Bentley has been
actually providing maintenance service for the owners of its cars in
In 2011, a facility
was put in place in HCMC to provide repair and maintenance services and
genuine parts of Bentley cars.
4 ex-VietinBank
bankers prosecuted in $48.2 mln lending scandal
The Supreme
People’s Procuracy has prosecuted four ex-bankers at a VietinBank branch in
The four former
banking officers include Tran Kim Hoa, 53, former deputy director of the
VietinBank’s Dong Anh District branch, Nguyen Xuan Thuy, 40, ex-head of the
branch’s Bac Thang Long transaction office, and two branch’s credit officers:
Dinh Cong Khanh, 34, and Ho Thi Kim Ngan, 26.
Most prominent
among the other 13 defendants is Nguyen Thanh Hung, 44, director of Thuy Tien
Construction One-Member Co Ltd, who colluced with many other defendants to make
false documents to get a huge amount of loans from the branch.
The four ex-bankers
have been charged violating regulations on lending at credit institutions,
while the other 13 defendants have been indicted with counterfeiting
materials of agencies and organizations, and swindling to appropriate
property.
According to the
indictment issued by the Supreme People’s Procuracy, from March 2008 to
October 2011, Hung and his accomplices used fake documents and the legal
status of 16 companies to sign 149 credit contracts with the branch to get
loans totaling over VND1,016 billion (US$48.2 million).
On February 2,
2012, when the illegal lending was uncovered, Hung and his accomplices failed
to pay a total debt of VND412 billion ($19.56 million), including about VND30
billion worth of interest.
Tran Kim Hoa,
former deputy director of the branch, knew that all the 16 companies were
unqualified for loans, but still directed Thuy to guide Hung’s employees to
forge sales contracts, business plan, financial statements and other
documents to make these companies eligible for loans, according to the
indictment.
Hoa then approved
the lending and during the disbursement of the loans, the above credit
officers (Khanh and Ngan) did not examine how the loans have been used by the
borrowers, the indictment said.
Besra
cashes in on $12 million gold customs tax refund
By Nguyen Trang
The Ministry of
Finance last week sent a formal notification to the company that an export
tax assessment totalling $12 million against the Bong Mieu Gold Mining
Company and Phuoc Son Gold Company had been repealed.
“The tax assessment
had been hanging over us for more than a year, causing the company
significant hardship. Our ability to import supplies and equipment was
suspended for a period, as was our ability to export gold. Additionally, the
$12 million assessment kept investors away and limited our access to credit
facilities. With the ruling now behind us, we can now rebuild our production
in
The General
Department of Customs (GDC) claimed in April last year that Besra’s Phuoc Son
and Bong Mieu gold companies operating in Quang Nam province, needed to pay
VND250 billion (approximately $12 million) in export duties.
In
Bong Mieu was asked
to pay VND47 billion ($2.26 million) and Phuoc Son VND202.6 billion ($9.7
million), according to the GDC.
In a document sent
to Besra, the GDC said that to enjoy an export tax rate of zero per cent,
exported gold must have an assessment certificate that ensured it met the
threshold. The regulations for certification were set out under Decree
20/2006/ND-CP detailing the provisions of the Commercial Law on the provision
of commercial assessment services.
However, when
investigating Phuoc Son Gold Mining Company, the department claimed that the
company’s certificates had not fallen under the provisions of the decree on
gold content. In mid-April, Besra filed a formal complaint seeking to have
the assessment withdrawn because it had not violated any regulations.
Although refining
in
ACB provided Besra
with a certificate from Quatest 3, a company under the Ministry of Science
and Technology – Vietnam’s largest and most reputable tester, who certified
their exported gold as four nine standard.
Delta plans
to swap rice for higher-value crops
Authorities in the
Cuu Long (
As part of a master
plan on restructuring agriculture to ensure sustainable development, they
would also seek to use 3.8 million hectares of arable land in the most
effective manner, diversify crops, and mitigate the pressure to consume rice
amid export hurdles, Pham Van Du, deputy director of the department, told a
meeting in
With the
spring-summer and summer-autumn crops usually plagued by low productivity,
local authorities should encourage farmers to plant other, more lucrative
crops instead, he said.
Based on local
factors, they should advice farmers on what crops to grow, he said.
Last year other
crops were grown on 87,314ha of low-yield rice fields in the region, with
The switch has
fetched farmers higher profits in recent times, he said.
Growing sesame on
rice fields has enabled farmers in Dong Thap to earn profits of VND25.3
million (US$1,199) per hectare, much higher than from rice cultivation, which
yields only around VND2.45 million ($116.2), he added.
Growing soybean,
maize, and lotus in rotation on rice fields has also fetched higher profits
than rice, according to the Dong Thap Department of Agriculture and Rural Development.
Farmers in Can Tho,
Kien Giang, Long An, and Bac Lieu earn more since they plant sesame, soybean,
maize, peanut, and other crops in their paddies, the meeting heard.
But delegates
warned that the biggest problem is to ensure steady outlets for the new crops
failing which farmers would return to rice.
Minister of
Agriculture and Rural Development Cao Duc Phat urged local authorities to
instruct farmers to grow crops whose demand is known.
He also told them
to focus on switching from low-yield rice to maize since there is a big
demand for the crop.
"Now we
produce 5.2 million tonnes of maize. Last year, the country imported 2.3
million tonnes...and the demand is increasing to meet the needs of the
livestock and seafood industries."
But as for switching
to sesame, chili, dragon fruit, or watermelon, farmers should be careful
since their prices would no longer be high if there is an increase in supply,
he said.
He called on
relevant agencies and research institutes to come out with a "technical
package" on instructing farmers in planting new crops.
His ministry would
work to accelerate implementation of the Government's policies for supporting
farmers switching from low-yield rice to other crops and provide funding to
train them, he said.
Local authorities
should strive to establish links between farmers and companies to ensure
outlets for crops, he added.
VAMC
tackles challenges of buying bad debts
Agreement and
sharing are critical in the current stage of handling purchased bad debts in
Vice President of
the Viet Nam Asset Management (VAMC) Nguyen Quoc Hung told Viet Nam News in a
telephone interview yesterday, in a response to rumours that the company
still faces issues in handling purchased debts.
The asset manager,
which was formed last July to acquire bad debts, has purchased about VND45
trillion (US$2.13 billion) of bad debts, of which the principal debt was an
estimated VND37.68 trillion ($1.78 billion).
Hung claimed that
VAMC plans to restructure VND14.7 trillion ($696.68 million) of bad debts by
145 borrowers that have not gone bankrupt and to collect debts, sell
collaterals and take legal actions against VND6.8 trillion ($322.27 million)
of debts by 343 borrowers.
"We are
definitely working to handle debts in the best possible manner, but it is not
as easy as it sounds," Hung noted. "We could not apply practices in
Malaysia or South Korea to handle bad debts in Viet Nam because these
countries have different frameworks and different social situations."
Hung noted that
VAMC will set time and space for borrowers to think, to cooperate and to
voluntarily hand out assets before it takes immediate action against them.
Initially, there were three borrowers who understood the message and were
willing to comply.
"Of course,
agreements take time," he added.
The vice president
also stressed that timing and pricing sales of collaterals were challenges.
"Who will buy
if we sell high, who will incur losses if we sell low? When will be the right
time to act?" Hung questioned.
Industry experts
suggested that related parties should share risks and economic values, or
handling bad debts will come to a complete standstill.
If VAMC has to
legally handle bad debts, it requires the collaboration of security forces,
legal bodies and state administration units.
In the meantime,
VAMC is waiting for guidance from the Ministry of Justice to legally conduct
sales of collaterals.
According to the
State Bank of Viet Nam, bad debts by the end of February accounted for
approximately 9 per cent of the total loans. Handling bad debts, according to
experts, is the definitive task that must be attended to in 2014-2015.
Prime Minister
Nguyen Tan Dung set up an inter-disciplinary steering board to lead the
mammoth projects of restructuring credit institutions by 2015 and solving bad
debts of the system.
"The
establishment of the committee shows a strong determination and commitment of
the Government to deal with bad debts," Hung added.
The board is
designated to advise the Prime Minister to implement and coordinate measures
to reschedule and solve bad debts of the banking system. Also, the board will
help ministries and municipal bodies supervise, detect and handle issues
emerging from the policy practices related to bad debts at credit
institutions.
Viet Nam's banking
restructuring plan towards 2015 was initiated last April in the provision of
improving the resilience of the money system, which is one of the three key
reforms of the economy besides state-owned enterprises reform and public
investment reform.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 10 tháng 5, 2014
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